Will Northleaf Sell Its Spirit Music Catalog Containing Pete Townshend, T. Rex & More Assets?

Spirit Music’s first catalog, which contains Pete Townshend’s publishing, T. Rex’s publishing catalog and masters, and Ingrid Michaelson’s music assets, might be coming up for sale, sources tell Billboard.

The catalog is currently owned by Northleaf Capital, which acquired it at some point since October 2021, when it provided $500 million in funding to Lyric Capital Group in a deal that was termed a “strategic alliance at the time. Lyric Capital was formed by Jon Singer and Ross Cameron, when they were still executives at Spirit Music, to buy Spirit Music and its catalog from original owner Pegasus Capital in 2018. Spirit Music is now the operational music company of Lyric Capital, and continues to serve as administrator for that catalog. 

According to some sources, Northleaf received an unsolicited bid and, as a fiduciary for the institutional investors who invest in the fund that owns the Spirit catalog, it had to present that offer to the catalog’s shareholders to see if it should explore a sale. It sounds like the shareholders decided to see what the catalog could get on the open market — specifically, whether it could fetch a higher price than the unsolicited bid — because sources say Northleaf has hired Brian Richards and his financial firm Artisan to approach potential suitors to see if they would be willing to make a bid. Sources suggest that Northleaf is seeking $500 million or more.

The catalog coming up for sale was initially assembled by Spirit Music founder Mark Fried, who founded the company in 1995 and left it in 2014. Back then, the catalog included songs by James William Guercio, Graham Nash, and Marilyn and Alan Bergman. The catalog was supplemented by David Renzer, who served as Spirit Music Group CEO from 2014 to 2018 and, during his tenure, acquired the Cal IV Entertainment company and song portfolio, which may be the reason sources say the Spirit Music catalog up for sale has a strong country music presence. Although it’s unclear if the Cal IV catalog is part of the sale, when Spirit acquired it in 2014, its catalog included numerous country hit records, including Faith Hill’s “Breathe,” Keith Urban’s “Stupid Boy,” Tim McGraw’s “Watch The Wind Blow By” and Jason Aldean’s “Big Green Tractor.”

When Billboard reported on Lyric Capital buying and recapitalizing Spirit Music in 2019, the catalog contained songs from such artists and songwriters as Billy Squier, Charles Mingus, Doc Pomus, Henry Mancini, Lou Christie, Louden Wainwright III, Marshall Tucker Band, Phil Coulter, Boz Scaggs, T Bone Burnett, Frank Rogers, Gregg Wattenberg, David Paich, Tim Hardin, and Richie Cordell, Jonny Coffer, Zach Crowell and James Bay. Again, it’s unclear if these songwriters and their music are included in the catalog up for sale. But at the time Lyric acquired Spirit Music, Billboard reported that the catalog was generating about $21 million in gross profit, or, in music publishing parlance, net publisher’s share, and that the deal supposedly carried a $280 million valuation, which at the time implied a 13.33 times multiple. 

When Lyric Capital came into the picture, sources suggested that it eventually became a significant majority owner of the first Spirit catalog, owning upwards of 95% or even more of the catalog, although sources suggest Lyric might still own a tiny sliver of it, in addition to retaining its role as the administrator following the Northleaf deal. Lyric Capital subsequently offloaded the backroom administrative functions to Downtown Music Publishing in 2024, although Lyric’s Spirit Music operation remains the official administrator and marketing force for the catalog’s music.

Currently, sources suggest that the catalog is generating about $30 million gross profit, split between about 85% in net publisher’s share and about 15% in net label share from either owned recorded masters or recorded master royalties. If $500 million or more becomes the asking price for the catalog, at that amount of gross profit, that would imply Northleaf is seeking at least a 16.7 times multiple. However, just because Northleaf appears to be exploring a sale, that doesn’t mean it will sell. It will come down to what price the catalog can command from suitors and if the high bidder’s offer presents enough profit for the seller.

Beyond the first Spirit music catalog, Lyric Capital and its Spirit Music publishing arm remain active music investors, acquiring and managing music catalogs. In 2023, Lyric Capital raised $800 million to pursue further acquisitions. Recently, the Nashville arm of Spirit Music acquired select songs from singer-songwriter Hardy’s music publishing catalog while also signing the artist to a go-forward exclusive writing agreement with the firm.

Northleaf, Artisan and Spirit Music didn’t respond to requests for comment.